In their book, The Body Economic: Why Austerity Kills, David Stuckler and Sanjay Basu demonstrate that, around the world, austerity has had devastating consequences on public health. Consider what economic shock therapy accomplished in the Soviet Union:
The Soviet economy collapsed in the early 1990s, erasing countless jobs. Ironically, those still working in public health kept good records of the disaster. Stuckler and Basu studied death certificates and found that "The rate of death rose by a disconcerting 90 per cent among the subgroup of men aged twenty-five to thirty-nine, in the prime of their lives."
The statistics showed that they died, in effect, from stress -- expressed in "alcohol poisonings, suicides, homicides, and injuries." And heart attacks.
On the other hand, consider the case of Iceland:
Having hosted an offshore-banking industry that imploded, the country experienced some noisy demonstrations that forced the government to hold a referendum: Should Icelanders pay to honour the debts of their bankers, or not?
The answer was no, much to the alarm of the EU. But the Icelanders toughed out the recession without sacrificing too many jobs or social support programs. Stuckler and Basu followed the Icelandic health records: death rates kept falling, and heart-attack rates were unchanged. So were rates of depression. People were working and earning less, but self-reported as feeling pretty good.
Or consider what has happened in Britain:
Britain coped fairly well under Gordon Brown's Labour government in the early years of the Great Recession, but David Cameron's Tory-LibDem coalition has caused a public-health disaster.
The evidence -- when people pay attention to it -- is clear:
The real key to economic growth is not to cut social programs, but to boost them. Every dollar spent on healthcare and education actually generates three dollars in the economy. And why not? A healthy, educated, economically secure population will ride out recessions in far better shape than one trying to cope with joblessness, depression, and alcohol.
In the end, Stuckler and Basu write:
Had the austerity experiments been governed by the same rigorous standards as clinical trials, they would have been discontinued long ago by a board of medical ethics. … Instead of austerity, we should enact evidence-based policies to protect health during hard times. … Ultimately austerity has failed because it is unsupported by sound logic or data. It is an economic ideology. It stems from the belief that small government and free markets are always better than state intervention.
Their conclusion is worth remembering when Mr. Harper and Mr. Flaherty tell us that their economic program is good for what ails us.